DERBY COLLEGE - THE JOHNSON BUILDING. Locomotive Way Pride Park Derby DE24 8PU

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1 DERBY COLLEGE - THE JOHNSON BUILDING Locomotive Way Pride Park Derby DE24 8PU

2 INVESTMENT SUMMARY The Johnson Building, part of Derby College, presents itself as a rare opportunity to acquire a modern, purpose built further education college building. Located on Pride Park, a highly successful mixed used business park in Derby City Centre, home to major occupiers such as Rolls-Royce, Royal Mail and Mercedes Benz. The property benefits from excellent transport links, located 0.25 miles from Derby Train Station and 8 miles from J25 of the M1. Long established, Derby College consists of 4 campuses, with The Johnson Building forming part of The Roundhouse Campus. Purpose-built further education facility totalling 93,190 sq ft, constructed in Site area of c acres, which reflects a low site density of c. 47%, with c.125 car parking spaces. Let to Derby College until 19 October 2029 with 11.9 years unexpired term. Current passing rent of 848,558 pa ( 9.11 psf) subject to a fixed uplift in October 2019 to 960,066 pa ( psf) and a further 2.5% pa compounded rental uplift in October 2024 to 1,086,229 pa ( psf). The vendor will top-up the rent to the fixed uplift in Offers are sought in excess of 13,330,000. A purchase at this level reflects an attractive net initial yield of 6.75%, rising to 7.64% at a fixed increase in October 2024, and a capital value of 143 psf. 2

3 The Johnson Building SNC Lavalin Resonate Software AG Seven Restaurant Holiday Inn & Harvester Pride Veterinary Hospital Chiquito Seat VW Mortgage Advice Bureau Geldards Law Firm Derwent Living Miller Homes HSBC Assystem Chartwell Rayburn Tours Business Centre ISYS U/O David Brown Pentahotel Derby College Derby College Derby College Derby Station Royal Mail Rolls-Royce Mercedes Benz David Lloyd Webhelp Store First Derby Network Rail Ford Derby County Football Club

4 LOCATION Situated at the heart of Pride Park, The Johnson Building is perfectly positioned to attract those wanting to further their education. The Johnson Building is located at the Roundhouse Campus of Derby College within Pride Park. Pride Park is one of the UK s most successful mixed use business parks. A number of office, leisure, car showroom and hotel operators are also on the park such as David Lloyd, Derby County Football Club, Rolls-Royce, VW, Mercedes Benz, Holiday Inn and Harvester. Situated just one mile from the centre of Derby and the Intu Shopping Centre, The Johnson building is perfectly located with excellent connections from the A52 and Junction 25 of the M1 motorway. It is also approximately 4 miles south east of Derby train station, which provides a direct link to Sheffield, Crewe, Leicester, Nottingham and London. Due to these outstanding transport links, Derby College attracts students from all over the county. Approximate distances from the property M61 M1 Bolton Oldham Barnsley Doncaster Wigan M18 A628 wsley M62 Widnes orn M60 Rotherham Stockport SHEFFIELD A34 A623 A49 M1 Chesterfield A60 A614 M6 A1 A523 CREWE A495 A53 A53 A41 MANCHESTER A34 A515 A6 A61 A523 STOKE-ON-TRENT M6 STAFFORD A52 A50 A515 A34 sbury A38 M54 M6TOLL M42 A458 A444 M18 A1M NOTTINGHAM DERBY Scunthorpe M180 A15 A46 A631 A156 LINCOLN NEWARK-ON-TRENT A52 A607 A6 A511 A46 Loughborough M1 A606 LEICESTER A47 A46 A17 A52 A15 A1 Derby Train Station 0.25 miles Derby City Centre 1 mile A601 A52 M1, J25 8 miles DERBY Nottingham City Centre 16 miles A6 RIVER DERWENT Derby Station Derby - Demographics Pride Park The Johnson Building A514 In 2016 the population of Derbyshire was estimated to be 787,000, whilst the population of Derby was estimated to be 254,374. A6 Of the total population of Derby, 5.4% are in the age group band, which is a higher proportion than the average for England for this age band. A5194 4

5 DESCRIPTION SITE PLAN The Johnson Building is a purpose built, further education facility which totals 93,190 sq ft, constructed in The building houses a variety of accommodation and facilities which are primarily focussed around vocational training in sport, motor vehicle repairs and construction. The ground floor includes a large sports hall, gym, dance studio, reprographics room, canteen, two large mechanic workshop facilities, a smaller mechanic garage (open to the public), and a construction workshop. Each of these elements has its own roller-shutter door providing flexibility of use. The first floor offers classrooms, a large IT suite and exam room. At the front of the building is a large two-storey office block providing a large reception area, kitchen, canteen and board rooms at ground floor, with a large open plan office and further smaller offices at first floor level. Externally, The Johnson Building has secure car parking areas to the front, side and rear with c. 125 spaces. *Indicative purposes only 5

6 ACCOMMODATION The building contains a variety of accommodation types. 6

7 TENURE The property is held freehold. TENANCY SUB-TENANCY Let for a further 11.9 years with guaranteed fixed rental uplifts in October 2019 and October The property is let to Derby College until 19 Oct 2029, currently at a passing rent of 848,558 pa ( 9.11 psf) subject to five-yearly fixed rental uplifts equivalent to 2.5% pa compounded. The next rental uplift is 20 Oct 2019 where the rent reaches 960,066 pa ( psf) with the final uplift in October 2024 reaching 1,086,229 pa (11.66 psf). The vendor will top-up the rent to 960,066 pa. DHU 111 (East Midlands) CIC have sub-let approximately 27,674 sq ft of The Johnson Building. Let on a term of seven years from 24 May 2017 until 23 May 2024 with a break on 23 May Rent of 217,688 pa ( 7.87 psf) with a rent review on 20 October 2019 from which a fixed rental uplift equivalent to 2.5% pa compounded will apply. A service charge is payable. The base service charge is currently 25,333 pa uplifted annually in line with increases in the General Building Cost Index. DHU 111 provides NHS 111 and Out-of-Hours call centre and medical services for Derbyshire, Nottinghamshire, Leicestershire, Rutland and Lincolnshire. 7

8 DERBY COLLEGE Derby College is a further education centre which was in established in the 1960s. The Johnson Building principally provides for Derby College mechanics and engineering courses, but also leisure, sports, construction and general learning for approximately 600 full time students. There is close collaboration with surrounding workplaces within Pride Park to offer hands-on experience for the courses which Derby College provide such as at Rolls-Royce and Ford. The college is a member of the prestigious Collab Group of high-performing further-education institutions. The College is judged as Good by Ofsted in all curriculum areas. Its engagement with employers is recognised as outstanding by Ofsted in their inspection report and in the Chief Inspector s Annual Report published in December

9 FUNDING & COVENANT Derby College - Tenant Derby College operates as a further education college and therefore places considerable reliance on continued government funding. From an income perspective, 77% of the college s revenue is public funding primarily through the Education Funding Agency (Department for Education) and Skills Funding Agency (Department for Business Innovation & Skills). In reference to financial statements for year ending 31 July 2016, Derby College s total income for the year was 48,159,000 and total expenditure 51,533,000. The College is required to complete the annual Finance Record for the Skills Funding Agency and for 2016 the College is deemed to be Satisfactory in regards to financial health. Funding is calculated using a specific formula which is driven by student recruitment and includes factors which reflect student retention, higher cost subjects, disadvantaged students and area costs. The Further Education sector is currently undergoing change, largely prompted by the obligation for all children to undertake education until 18, formerly 16. The Government is therefore focusing on the Technical and Further Education Bill is set to be a hugely significant year for Apprenticeships and Skills as the Apprenticeship Levy comes into force and 2.5 billion is invested in apprenticeships by DHU 111 (East Midlands) CIC - Sub-Tenant of Part DHU 111 provides the NHS 111 and Out-of-Hours services for Derbyshire, Nottinghamshire, Northamptonshire, Leicestershire, Leicester, Rutland and Lincolnshire. It is a not-for-profit organisation. DHU 111 is consolidating from several other offices around the East Midlands into this facility, which will become its main call centre operation. Approximately 150 staff are due to move in to the office in the coming months in a phased manner. DHU 111 (East Midlands) CIC was incorporated in 2016 as a subsidiary of DHU Health Care CIC, to support East Midlands NHS 111 calls. The company s single largest contract was successfully retendered and awarded for a five year term with the possibility of a further two year extension to 30 September The contract commenced on 27 September

10 CAPITAL ALLOWANCES Further information available on request. EPC The property is rated C55. Further information available on request. VAT The property has been elected for VAT. It is proposed that the sale will be treated as a Transfer Of a Going Concern (TOGC). PROPOSAL Offers are sought in excess of 13,330,000. A purchase at this level reflects an attractive net initial yield of 6.75%, rising to 7.64% at fixed uplift in October 2024, and low capital value of 143 psf. Purchasers costs are assumed to be 6.72%. CONTACT For further information or to arrange an inspection, please contact: John Rodgers T: M: jrodgers@geraldeve.com Richard Lines T: M: rlines@geraldeve.com Nick Ogden T: M: nogden@geraldeve.com Joanna Ireland T: M: jireland@geraldeve.com Conditions under which these particulars are issued: All details in these particulars are given in good faith, but Gerald Eve LLP for themselves and the Vendors/Lessors of this property for whom they act give notice that:- 1. These particulars do not and shall not constitute, in whole or in part, an offer or a contract or part thereof, and Gerald Eve LLP have no authority to make or enter into any such offer or contract. 2. All statements contained in these particulars are made without acceptance of any liability in negligence or otherwise by Gerald Eve LLP, for themselves or for the Vendors/Lessors. 3. None of the statements contained in these particulars is to be relied on as a statement or representation of fact or warranty on any matter whatsoever, and intending purchasers must satisfy themselves by whatever means as to the correctness of any statements made within these particulars. 4. The Vendors/Lessors do not make, give or imply, nor do Gerald Eve LLP or any person in their employment have any authority to make, give or imply, whether in these particulars or otherwise, any representation or warranty whatsoever in relation to the property. This statement does not affect any statutory rights you may have nor does it intend to limit Gerald Eve s liability which cannot be excluded or limited by law. Particulars issued November